2023 (4) TMI 1231 - HC - Income Tax

Reopening of assessment - Scope of new provision section 148A - Scope of amendment by the Finance Act, 2021 which has amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021 - contention petitioner that the notice dated 02.06.2022 issued under Section 148A(b) of the Act, lost its efficacy after 03.06.2022 - HELD THAT - As relying on Instruction No.1/2022 dated 11.05.2022 issued by the Central Board of Direct Taxes (CBDT) the extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. 2022 (5) TMI 240 - SUPREME COURT Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with. Within 30 days i.e, by 2nd June 2022, the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices. The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee. If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee. The submission made by petitioner is that the absence of name and designation of the concerned officer, violates the provision of Section 282A of the Act is acceptable. Having regard to the provisions of the said instruction, in our view, the notice issued u/s 148A(b) of the Act cannot be sustained. It is, accordingly, set aside.

Summary

Issues Involved:
The judgment concerns a writ petition related to Assessment Year (AY) 2015-16, focusing on the validity of a notice issued under Section 148A(b) of the Income Tax Act, 1961, and compliance with relevant instructions issued by the Central Board of Direct Taxes (CBDT).

Validity of Notice under Section 148A(b) of the Act:
The petitioner contended that the notice issued under Section 148A(b) of the Act lost its efficacy after a certain date, citing a Supreme Court judgment and an instruction issued by the CBDT. The petitioner argued that the notice did not bear the name and designation of the concerned officer, violating Section 282A of the Act. The court, considering the provisions of the CBDT instruction, held that the notice dated 02.06.2022 issued under Section 148A(b) of the Act was unsustainable and consequently set it aside. The order issued under Section 148A(d) of the Act was also set aside, allowing the respondents/revenue to proceed in accordance with the law.

Compliance with CBDT Instructions:
The court referred to Instruction No.1/2022 issued by the CBDT, emphasizing the requirement for Assessing Officers to provide information and material relied upon within 30 days for cases falling under certain criteria. The instruction outlined the procedure for compliance with the Supreme Court judgment, including the timeline for providing information to the assessee and the subsequent steps to be taken by the Assessing Officer. The court's decision was based on the petitioner's argument regarding the non-compliance with these instructions, leading to the setting aside of the notice and order in question.

Correcting Title of the Case:
During the proceedings, it was noted that the cause list did not accurately reflect the title of the case. The correct title was identified as "LSR Medical Pvt. Ltd. v. DCIT Circle 13(1) & Anr." and not as previously listed. The writ petition was disposed of based on the arguments presented by the petitioner, and the pending application was closed accordingly.